But recent audits show major problems in how the Defense and State departments and
the U.S. Agency for International Development continue to spend billions of
dollars in Afghanistan.

Exhibit A for the Senate Homeland Security and Governmental
Affairs Subcommittee on Contracting and Financial Oversight Tuesday was an alert
letter the Special Inspector General for Afghanistan Reconstruction (SIGAR) issued
last week. It found DoD spent $34 million to build a command and control facility
at Camp Leatherneck in Afghanistan in 2011 that the military didn't want or need,
and that the military awarded a contract a year after local commanders requested the project be canceled.

The facility, outfitted with office space and furnishings for a three-star general
and up to 1,500 members of his division-level staff, has never been used. (View photos here.) Because
the contractor constructed the building's electrical infrastructure to U.S.
specifications, it's essentially useless to the Afghan government. So officials
told the IG it will most likely be demolished.

Failed to meet terms of the contract

Richard Ginman, DoD's director of pricing and acquisition policy, said the Army is
investigating to determine accountability for the decisions leading up to the
facility's construction, which involved ongoing improvements to the building as
late as early 2013.

"I have no ability to sit here and give you an answer as to how that occurred or
why," he said. "We need to let the investigation run its course, but at least from
my perspective at this point, it defies logic."

A separate report from SIGAR this week, released after the
hearing, found that the contractor on a separate training facility for Afghan
teachers failed to meet the terms of the contract. Auditors found that the
building exposes Afghans to fire and electrical hazards, sewage and other health
risks. But the Army Corps of Engineers paid the contractor in full without holding
it accountable for the problems, according to SIGAR.

While problems continue, the progress by the three agencies to improve wartime
contingency contracting over the last year is real.

Leaders from DoD, State and USAID testified on Capitol Hill about the steps
they've taken to fix contingency contracting, including checking several boxes on
a long list of reforms Congress mandated in this year's Defense authorization
bill. They cited gains in developing clearer lines of responsibility for
contracting, better oversight and better data collection.

In 2011, the Commission on Wartime Contracting concluded that the government wasted between $30 and $60 billion in Iraq and Afghanistan. But on Wednesday, Sen. Claire McCaskill (D-Mo.), who helped create the independent commission, acknowledged that contingency contracting has improved.

"It is much better than it was in 2007 in every single one of your agencies," she
said.

Who's in charge?

Ginman said DoD has taken steps to introduce more accountability, responding to
one of the provisions in last year's law that requires it to establish a chain of
authority for policy, planning and execution of contract support.

"I refer to this as the 'who's in charge' question," he said.

Ginman said DoD continues to implement a 2009 directive that attempted to establish clear lines of
responsibility at the highest levels of the Pentagon.

"It lays out clearly who's in charge," he said. "At the end of the day, it's
Secretary Hagel, but you have the undersecretary for personnel and readiness who
has responsibilities for managing the force, of which contractors are a piece. The undersecretary for acquisition, technology and logistics has very clear
responsibilities when it comes to the issues of contracting and the management of
contractors on the battlefield. We have the comptroller who has very clear
responsibilities with the funding and what we're doing with it. The undersecretary for policy has very clear responsibilities as well."

DoD also has made major strides in overseas contract oversight performed by
contracting officer representatives, increasing their ranks from 40 trained four
years ago to more than 400 now.

A more difficult and more important step, Ginman said, is to inculcate the notion
throughout the military that deployed commanders are responsible for contracting
that happens in their battlespace.

"It's not the policy — it's the doctrine and getting that to a point where
everyone understands what it is," he said. "It's the professional training; it's
the execution; it's the exercises. We're encouraged when we see that both Gen.
[David] Petraeus and Gen. [John] Allen sign letters out that say that contracting
is the commander's business. When you have 100,000 people on a battlefield,
getting that so that it's understood is far and away the largest gap that we have. It is one that we're actively working on, but it's not one we're going to solve today or tomorrow. We have a long way to go."